Los Angeles County's second-largest advertising agency on Friday terminated nearly one-fifth of its workforce — about 200 people — after losing much of its signature American Honda Motor Co. account.
Santa Monica based Rubin Postaer & Associates, which opened in 1986 to handle Honda's advertising business, was dealt a significant blow in March when the Torrance-based carmaker decided to divvy up advertising duties among three separate agencies.
Previously, RPA was responsible for producing commercials and other creative content for Honda as well as its luxury brand Acura. It also handled the planning and negotiation of Honda's and Acura's ad buys.
RPA held on to the Honda creative account but lost two other pieces of Honda's business. Mullen, a mid-size agency in Boston, took over the Acura creative account. The advertising buying side of Honda's business went to New York firm MediaVest.
RPA declined to comment Friday on the layoffs, which are typical in the volatile advertising industry. But RPA had long been one of the most stable advertising shops in L.A. until late last year when Honda decided to put its account into review.
Anticipation of the cuts has been rattling the agency, which until this week boasted nearly 700 employees.
In addition to the Honda creative account, RPA continues to service such companies as Mandalay Bay, Farmers Insurance, La-Z-Boy, Intuit, California Tobacco Control Program and the Honda/Acura Dealer Assns.
RPA was one of the largest independent advertising agencies in the western U.S., with billings that exceeded $1 billion.
RPA originally formed because of a major consolidation in the advertising world. The Needham Agency, which had the fast-growing Honda account in Los Angeles, merged with two other powerful firms to form the advertising behemoth Omnicom. Needham executives Gerry Rubin and Larry Postaer splintered off in 1986 and formed their own agency to hold on to the Honda account.
With this week's layoffs, RPA could cede its status as the second-largest agency in the region. The giant TBWA\Chiat\Day is the largest L.A agency. The Playa Del Rey-based Deutsch LA could become No. 2.
[For the record 11:16 a.m. June 1, 2013: A headline on an earlier version of this online article stated that RPA had fired more than one-third of its workforce. The cuts Friday were equal to about one-fifth of its staff.]